Support for domgas review, page-70

MIN has clearly found a fairly large amount of gas but relative to what it had expected after LD1, the net recoverable gas from the Lockyer field has decreased significantly following the LD2 result. Just how much gas they hold is subject to further appraisal drilling. I bought MIN not for its gas, but the fact that I believed it was quite undervalued after it had fallen to the 50s.

The WA govt decision on domgas policy will have a huge impact on decisions by many companies going forward. I suspect if the export ban is lifted even on a partial basis to say 50% domestic reservation, we will likely see a new wave of consolidation in the region. The economics of building 3 processing plants by 3 different operators simply makes no financial sense. The attractiveness of using the precinct as the processing hub will appeal to many too given its ease of environmental approval and central location to all the gas fields as well as the pipeline.

MIN and Hancock had been the most discussed candidate to have a tilt at STX, but I personally wouldn't rule out BPT. A proposed merger between the two would create a PB powerhouse, though the historical animosity between Stokes and Poynton may make the deal harder to achieve.

At the end of the day, we have the largest amount of gas in an environment where price will likely remain high for many years to come, and a very large landholding containing several very promising undrilled prospects. We also have a board that is very much aligned with its shareholders, as well as a geo team with a barely believable track record of successful discoveries. Most importantly, our earnings growth trajectory is enormous, with the added bonus of what could potentially be an extremely positive regulatory catalyst in accessing the export market. I know I am stating the obvious and repeating what had been said by others, the way I see it is that STX is in a win win situation regardless of whether a suitor come or not

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